Tory donor 'sought Forgemasters loan cancellation'

Thursday, 22 July 2010 12:00 AM

By politics.co.uk staff

A Conservative donor successfully lobbied the government to secure the cancellation of the Sheffield Forgemasters loan, MPs have heard.

Labour MPs claimed a letter from another Sheffield industrialist, Andrew Cook, had sought to prevent the £80 million loan to the manufacturing firm after donating over £500,000 to the Tories since 2005.

Sheffield South East MP Clive Betts quoted a letter from Mr Cook dated May 25th which warned that the loan, approved in the last days of the Labour government, was "probably unnecessary and possibly illegal under EU rules".

He had begun the letter to business minister Mark Prisk by stating: "I am the largest donor to the Conservative party in Yorkshire and have been since David Cameron was elected leader."

"I believe the private sector could provide the required finance without the taxpayer shelling out," he was quoted as saying.

"It is a typical Labour 'sacred cow'. I believe you may be the best person to consider this matter as Vince Cable may find it a difficult nettle to grasp, being as Nick Clegg is a Sheffield MP."

The Sheffield Forgemasters loan was among the final decisions taken by Labour minsters which were reversed by the coalition government.

Mr Prisk insisted that the reason for the decision was that "the loan was simply unaffordable".

He added: "When I receive something of that nature, as a minister, I do not give a monkey's whether the person is a donor to the Conservative party, the Labour party, or any other party.

"What I am primarily concerned with is making sure that the matter is dealt with equally."

He rejected the suggestion that a Tory party donor was successfully twisting events in the interests of his party, adding: "The argument that somehow a Conservative party donor is twisting the arm of the Liberal Democrats does not make any logical sense."

But Labour leadership contender Ed Miliband called the intervention "extraordinary".

"With each new revelation about the botched cancellation of the loan to Forgemasters, this government looks more muddled and confused," he said.

"I am confident that any independent panel would show that the loan should be reinstated for the good of Britain's low carbon economy and for future jobs."

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